While the value of a variable annuity has sunk along with the stock market, it may actually be a good idea to purchase one soon if you’re interested. Marc Ruiz in the Chicago Post-Tribune points out that the variable annuities currently on the market filed their contracts with regulatory agencies last May, before the current financial crisis. Federal law prohibits insurers from deviating from that contract during the regulatory year, and existing investors will not be subject to the changes afterwards.
Guaranteed minimum income benefits currently available may be discontinued or have higher fees in the future, and annuity rates will probably be less attractive to investors. If a variable annuity is right for you, it may be a good idea to lock in these offers before contracts are adjusted in May.
